Earnings Results: Wellness and returns to the office kept beauty products in demand. Now, Ulta Beauty execs say, prices are starting to fall

by | May 25, 2023 | Stock Market

For the past two years, sales at beauty-products and salon chain Ulta Beauty Inc. have ballooned, as the economy’s reopening from the pandemic — and the return to vacations, offices, restaurants and concerts — made presentability a bigger priority. And as prices fell for other leisure purchases, from TVs to pants to laptops, prices for cosmetics, skincare and haircare stayed high. But now, Ulta Beauty
executives said Thursday, rivals have started to cut prices for beauty products.

“Inflation concerns remain high, and consumers are spending more selectively while also showing a continued willingness to splurge and treat themselves,” Chief Executive Dave Kimbell said on Ulta’s first-quarter results earnings call on Thursday. “Engagement with beauty remains strong, reflecting the prioritization of self-care,” he continued. “Category growth is healthy but moderating as we lap two years of unprecedented growth. And as category growth normalizes, promotional activity is increasing.” He said that, like in previous quarters, sales for the chain’s mass-market products were growing more than its prestige brands. But he said it was difficult to tell whether that was due to more consumer caution or stronger demand for products from the likes of e.l.f. Beauty Inc.
or La Roche-Posay. “While we do not intend to lead promot …

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